How much RAM do you guys have?
Also, can you try to boot the 2.6.18 kernel without an initrd?
Basically, download the installer image from
http://people.debian.org/~ths/d-i/mipsel/images/daily/cobalt/
and then edit default.colo so it will only load the kernel. You can
use something like this as your default.colo:
#:CoLo:#
#
# load kernel via NFS
#
-serial on
nfs {dhcp-next-server} {dhcp-root-path} vmlinux-2.6.18-3-r5k-cobalt
execute console=ttyS0,{console-speed}
--
Martin Michlmayr
http://www.cyrius.com/